The Human Capital Legacy of a Trade Embargo

Abstract

We estimate the effects of in-utero exposure to a trade embargo on survival and human capital in an import-dependent developing country. Using a regression discontinuity design, we find that a nearly comprehensive embargo imposed by India on Nepal in 1989 led to a large decline in reported live births, and increased early life mortality. The decline in births is concentrated in poorer, more remote districts, and is sharper for female births than male births, consistent with documented gender discrimination. Women survivors of exposure are more educated in adulthood than unexposed cohorts.